Wage Theft

Articles and Reports

Study Finds Violations of Wage Law in New York and California by Steven Greenhouse, New York Times, Dec. 3, 2014. A study of workers in New York and California done for the US Dept. of Labor finds that more than 300,000 workers in each state were paid less than the legally required wage each month. These violations translate into $20 million to $29 million in lost income per week, or a loss of 38% of the income of the victimized workers in New York and 49% in California. If a similar rate of violation exists in the whole nation, then more than two million workers suffer from lost wages each month. While the number of DoL inspectors has increased to 1,040 from 731 in 2008, much more enforcement is needed. Since 2009, the DoL has recovered $1 billion in wages lost to “wage theft.”

More Workers Are Claiming ‘Wage Theft’ by Steven Greenhouse, New York Times, Aug. 31, 2014. More companies are violating wage laws than ever before. Workers’ wages are being stolen by their employers.

As Common as Dirt by Tracie McMillan in American Prospect, Sep/Oct 2012. In the fields of California, wage theft is how agribusiness is done.

Wage theft is the term used to describe the common workplace practice of not paying workers all the wages they earn. The U.S. Department of Labor (DOL) has found these violations in more than half of the businesses they have investigated in entire industries such as construction, garment assembly, poultry processing, and retail. Among workers in low-wage industries in New York, Chicago, and Los Angeles, during a single week, over two-thirds were victims of wage theft. Nationwide, millions of workers each week, particularly those in low-wage jobs, suffer the theft of their wages by unscrupulous employers.

Wage theft refers to a number of activities done by employers that, illegally, deprive workers of wages earned. These activities include:

violations of minimum wage laws;

non-payment of time-and-a-half overtime pay;

workers being forced to work off the clock;

workers not receiving their final paychecks when they end a job;

workers having their tips stolen by management;

workers mis-classifed as independent contractors instead of employees to enable employers to avoid paying minimum wages, overtime, and the employer share of payroll taxes, workers compensation insurance, and benefits; and

in some egregious cases, workers are not paid at all, even after putting in hundreds or even thousands of hours of work.

Wage theft is a far bigger problem than bank robberies, convenience store robberies, street and highway robberies, and gas station robberies combined. In 2012, the Department of Labor recovered $280 million in back pay for 308,000 workers, money that had been stolen by wage theft. That amount – a small fraction of the total wage theft nationwide – far exceeded the total lost to criminals in street and highway, bank, gas station and convenience store robberies in 2012. The U.S. Department of Labor is the one agency that brings substantial resources to the effort to prevent and remedy wage theft, but its total staff of wage and hour investigators, about 1100 in all, is responsible for securing compliance from more than seven million employers. This means enforcement is completely inadequate. More.

What Can Be Done

1. Diligent law enforcement by the U.S. Department of Labor (DOL) and state Departments of Labor is needed to increase enforcement.

2. National legislation is needed to strengthen protection of workers and enhance enforcement.

3. State and local legislation is needed to prohibit wage theft and strengthen protections against payroll fraud.

4. National legislation is needed to strengthen the universally-recognized right of workers to form or join a union; unions in the workplace are one of the best deterrents against wage theft.

5. Strengthen community worker centers (over 200 have formed in the past decade) to help workers build their own power to recover wages and organize improvements in the workplace.

Get Involved to Stop Wage Theft

1. Educate yourself and your congregation using the resources below and others.

2. Volunteer with a worker center or religion-labor organization near you.

• Read and discuss Wage Theft in America: Why Millions of Working Americans Are Not Getting Paid And What We Can Do About It by Kim Bobo.

• See Stopping wage theft, an interview with Kim Bobo, author of Wage Theft in America: Why Millions of Working Americans Are Not Getting Paid And What We Can Do About It and executive director of Interfaith Worker Justice.

• Read Broken Laws, Unprotected Workers: Violations of Employment and Labor Laws in America's Cities [1.1MB] by Annette Bernhardt and others. Researchers interviewed a representative sample of over 4,300 workers in low-wage industries in Chicago, Los Angeles, and New York City. More than two-thirds (68%) experienced wage theft during the previous work week, for example, 26% of workers were paid less than the legally required minimum wage and of the one-quarter of all the workers who worked overtime, 76% were not paid the legally-required overtime pay rate.